Splitit: why this payments company is dividing the market

The last time fund manager Dean Fergie’s cycling buddies had such a specific interest in the financial markets was during the bitcoin boom.

“Two years ago, everyone was going, hey, what about bitcoin. Now it’s about Splitit – it’s the stock everyone is talking about,” says the Melbourne-based Cyan Investment Management director whose fund bought shares in the company during its initial public offering.

Splitit Payments, a company that gives credit-card customers the option of paying for purchases in instalments, listed on the Australian Securities Exchange in January with a market capitalisation of just $54 million, issuing shares at 20¢ each. Now, its market capitalisation is $450 million – more than nine times its value less than three months ago – and the company often sees more than 10 million shares change hands in a day.

But this week, Splitit was forced to respond an ASX “speeding ticket” to explain why its shares more than doubled on March 4. The answer, according to the company, was three positive news reports.

“I genuinely am as confused as anyone that it has had such momentum with nothing being released to the market,” Fergie says. “Either it’s a perfect storm, or else there is something going on that I don’t know about.”

So why has this unproven company – even one in the red-hot buy-now, pay-later space – soared in a market that had been expected to spurn the new IPOs?

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